Commenting on the IGR, which found the number of Australians aged over 65 will double by 2055, Challenger chief executive Brian Benari said the fiscal pressure on the country’s ageing population is a “long-term and complex problem”.
“The good news is that there are two quick wins that the government can move forward today,” Mr Benari said.
“We need to urgently level the taxation playing field to allow the introduction of deferred lifetime annuities, which will come at no cost to revenue, and has bi-partisan political and wide industry support.”
The industry and government must start “giving shape” to the Financial System Inquiry’s recommendation that superannuation funds offer their members retirement income products with longevity protection, Mr Benari said.
“We are four years into the retirement phase of the Baby Boomer generation and over the next 40 years, the proportion of the population over the age of 65 will more than double to 22.6 per cent,” he said.
“By putting a spotlight on the macro trends of our ageing population, the IGR’s findings should encourage development of the type of retirement income products that enable people to plan with confidence for a longer retirement.
“With Australia’s annuity market representing 0.3 per cent of GDP, compared with more than 15 per cent in the United States according to the FSI report, we’ve clearly got some catching up to do in providing longevity risk protection to super fund members,” Mr Benari said.
